Can the GOP Finally Get Rid of the DEATH TAX?

Republicans are pushing to abolish the federal inheritance tax, sparking a debate on family businesses and economic fairness.

At a Glance

  • GOP lawmakers introduce the “Death Tax Repeal Act” to eliminate federal estate tax
  • Over 170 House Republicans and 45 Senate Republicans support the legislation
  • Current estate tax affects estates worth $13.9 million or more
  • Republicans argue the tax unfairly burdens family farms and small businesses
  • Critics contend the tax impacts only a small number of wealthy estates

Republican Push for Estate Tax Repeal

Republican lawmakers are leading a charge to repeal the federal inheritance tax, commonly known as the “death tax.” The effort, spearheaded by Rep. Randy Feenstra (R-Iowa) in the House and Senate Majority Leader John Thune (R-S.D.) in the Senate, has garnered significant support within the GOP. The proposed “Death Tax Repeal Act” aims to eliminate what Republicans view as an unjust financial burden on grieving families, particularly those inheriting small family-owned farms and businesses.

“The death tax is an egregious double tax that unfairly targets American family farms and small businesses and directly threatens long-held farming traditions in rural Iowa and across the country. It is ridiculous that the federal government sends grieving families a massive tax bill when a loved one passes away,” Rep. Randy Feenstra said.

The push for repeal comes as part of a broader Republican effort to extend certain aspects of the 2017 Tax Cuts and Jobs Act. Under current law, the estate tax applies to estates valued at approximately $13.9 million or more. However, if the tax cuts are not extended, this threshold could drop to around $7 million by 2026, potentially affecting a larger number of estates.

Impact on Family Businesses and Farms

Proponents of the repeal argue that the estate tax disproportionately affects family-owned farms and small businesses, forcing some families to sell portions of their assets to cover the tax burden. This, they contend, threatens the continuity of family-run enterprises and rural traditions.

“Family farms and ranches play a vital role in our economy and are the lifeblood of rural communities in South Dakota,” Senator John Thune said.

The legislation has gained support from various agricultural and business organizations, who view the estate tax as a threat to generational wealth transfer and business continuity. Critics, however, argue that the tax affects only a small fraction of the wealthiest estates and serves as an important mechanism for preventing the concentration of wealth.

Legislative Details and Support

The Death Tax Repeal Act proposes to fully eliminate both the Estate Tax and the Generation-Skipping Transfer Tax (GSTT) while maintaining the step-up basis. This would effectively remove the tax liability for all estates, regardless of their value. The bill has garnered support from over 170 House Republicans and 45 Senate Republicans, indicating strong party-line backing for the measure.

“Families shouldn’t have to sell major portions of their businesses or farms after the death of a parent just to afford the estate tax. Breaking apart a family’s livelihood is neither fair nor good for the economy. This legislation would end the federal death tax, making it much easier to preserve a family’s legacy and way of life,” Senator Tom Cotton said.

While the Republican push for estate tax repeal has gained momentum, the legislation faces significant hurdles in a divided Congress. Democrats generally oppose the repeal, arguing that it primarily benefits the wealthy and could exacerbate income inequality. As the debate continues, the fate of the “death tax” remains a contentious issue in the broader conversation about tax reform and economic fairness in America.

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